In the U.S. equity market, the worse a company's finances, the better it's doing.

Stocks with the weakest balance sheets have climbed more than 8 percent in 2014 and 94 percent since the end of 2011, generating almost twice the gain in the Standard & Poor's 500 Index over that period, according to data compiled by Bloomberg and Goldman Sachs Group Inc. Shares in the category this year are beating those that most investors consider the bull market's leaders, such as small caps and biotechnology, which tumbled in March.

Gains are being sustained by speculation that the corporations whose finances put them most at risk will thrive as the economy improves. Helped by rising bond issuance and falling defaults, stocks from Tenet Healthcare Corp. to Frontier Communications Corp. are advancing even as Federal Reserve policy makers take steps to end unprecedented economic stimulus.